It was a rare opportunity to undertake a project in BAJAJ
ALLIANZ LIFE INSURANCE COMPANY Ltd. a organization that is well known for
its values and practices in Insurance sector that it imbibes into all individuals who, no matter,
even for a short duration, enter the premises of this organization.
I am thankful to Mr. ARJUN SINGH YADAV ( Human Resource
UP-2), whose thorough guidance and direction, has helped me accomplish this project with
maximum understanding and education.
I am grateful to our Head of Department Prof, I.L.SINGH and project
guide Dr. SANDEEP KUMAR to provide their valuableinputs throughout this study.
I am thankful to all myProfessors for their significant support and guidance.
I would like to express my gratitude towards all employees of BALIC who
have given their earnest support, directly or indirectly for this project.
OBJECTIVE OF THE PROJECT
To help in retaining the employees with knowing the
causes of attrition.
To analyze and identify factors that help retention.
To ascertain effectiveness of retention measures
taken by BALIC
To explore employees perceptions of the overall
To identify current areas of concern and
opportunities for improvement.
The corporate world today is focused on concepts
about leadership, retention, management, attracting the right person for
right job and other various aspects of the people side of business. Modern
organizations are operating in an unprecedented, highly competitive and
turbulent business environment which is characterized by the globalization
of business. Further, today’s global workforce is more mobile than ever
before .Focus of BALIC is on retaining and developing a company is most
valuable asset i.e.; people.
Management of an organization is
human capital starts prior to hiring an individual. It starts with hiring
individuals that possess the characteristics need for the job, the motivators
satisfied by the job and culture of the company and the drive to
contribute to the overall success of the company. It offers assessment to
determine the behavioral characteristics and attitudes that naturally fit with
Due to very high rate of attrition organization
is thus working very hard to know the causes of attrition , so that by
having effective management in that area we can help in retaining
employees for BALIC. The HRD of this organization seems very effective.
They are trying to undertake numerous measures for employee retention
and control employee turnover.
Hence, the main objective, to initiate this project
was to retain employees by knowing the causes of attrition and also to
help organization to reduce attrition rate.
INTRODUCTION TO RETENTION CONCEPT
a. The act of retaining.
b. The condition of being retained.
c. Capacity or power of retaining.
Retention is important for the following reasons:
Replacing qualified employees can be extremely difficult,
exceptionally expensive, and very often unnecessary.
Training new employees is costly.
Poor retention creates a "revolving door" culture within the
organization, lowering morale and confidence
Poor retention affects your customers (no matter the type of
business you have, your customers develop important relationships
with their contacts within your organization).
High turnover eats away at your organization's productivity, ability to
deliver, and overall efficiency. This sad reality always manages to
impact your customers negatively in one way or another.
When there are so many benefits associated with organization .
when there are so many privileges for the employees than
what makes them to change the company/industry?
Is it only MONEY that matters or anything else as well?
No growth opportunity/lack of promotion
For higher Salary
For Higher education
Misguidance by the company
Policies and procedures are not conducive
No work life balance
Uneasy relationship with peers or managers
Uneasy flow of communication.
Turnover of key employees is another big HR risk that companies face
today. The increasing knowledge intensive nature of many businesses
creates serious problems when talented employees leave. So, companies
must do what is necessary to retain their best managers. Attracting and
retaining talent is not just a matter of higher 'salaries and more perks. It
involves shaping the whole organization, its
vision, values, strategy, leadership, rewards and recognition. Thus,
companies must look at retention as an exercise that ensures long-term
employee commitment rather than as a knee jerk response to hold back
employees after they resign. An effective retention strategy must be built
around the following:
Taking note of the company's culture, designing, and building the
Assessing potential candidates for hiring, following careful hiring
Measuring and understanding the issues driving retention
Putting in place well designed career-development plans
Designing an attractive and transparent reward system.
Building the right culture is an important step in improving
It involves understanding the existing values, clarifying business
goals' and strategy, defining the desired culture and introducing
change management initiatives, wherever necessary to correct the
state of affairs.
Fostering the ideal work culture involves various steps:
Hiring people with leadership potential rather than just managerial
Articulating a strong corporate purpose that makes people believe
that they are making a positive impact on society.
Treating people with dignity and respect.
Interacting regularly with employees talking to them to understand
the problems they are facing and giving them the additional
resources they may need to discharge their responsibilities efficiently.
Attempting to influence rather than control employees.
Modern organizations are operating in an
unprecedented, highly competitive and turbulent business
environment which is characterized by the globalization of business.
Further, today s global workforce is more mobile than ever before.
Modern organizations are becoming increasingly aware that a critical
source of competitive advantage often comes not from having the
most ingenious product design or service, the best marketing
strategy, state of the art technology, or the most savvy financial
management but from appropriate systems for attracting and
retaining human resources. Retention starts at the top. Seeking,
getting, and keeping qualified, a motivated employee is the
responsibility of the governing board and its hired
director/administrator. Getting and keeping good staff demands
focused that make retention a prime management outcome.
Managers need to appreciate staff every day and constantly work to
keep them onboard.
Employee Retention Strategy is based upon two primary beliefs:
It is difficult for employers to retain good employees if they don't
have a process to hire the right people in the first place.
(2) Retention processes must directly support the reasons that
successful, satisfied employees stay.
Retaining good staff begins in the recruitment/ hiring
phase. Spending the energy to find/hire the best candidate will benefit
organization and the new employee over the long term. Recruit and hire
new employees who fit the job, organization, and the existing staff. Much
like building an athletic team, recruit players (staff) who best fit the play
book (organization s mission/values). Hire for a good fit and attitude.
Attitude and motivation are not easily changed; job skills can be learned
later, during training. More people lose or leave jobs because they did not
fit the workplace culture than from lack of work skills. Once ideal
candidates are hired, their orientation and training are paramount.
Orientation is the critical fitting in phase. New hires are oriented to the
workplace culture, are trained in the tasks, and learn the agency s
expected outcomes. Nurturing staff is a ongoing, a day-to-day activity.
Clear and open communication is the best foundation for nurturing staff.
Nothing says respect or models empowerment more than managers who
actively listen to their employees. The active listener appreciates the
employee s feelings, input, and concerns. Listening is the most cost-
effective way to acknowledge people. Being heard builds self-esteem and
employees with high self-esteem feel trusted and valued and are less likely
to feel marginalized. Rewards and recognition can be powerful tools. More
and more agencies use informal methods of rewarding staff.
Compensation and other financial benefits are becoming less the norm for
recognizing employee accomplishments. Reward systems that are person
based are proving to be effective, when recognition is linked to personal
desires or needs such as time off, job sharing, flex-time, office space,
special tasks, public acknowledgment, news releases, etc. The most
important part of any informal reward/recognition system is that it is
linked to organizational values and that it is personally given from
management. An organization should foster retention incentive to a
current employee if it determines that the unusually high or unique
qualifications of the employee or a special need of the agency for the
employee's services makes it essential to retain the employee and that the
employee would be likely to leave in the absence of a retention incentive.
Retention practices assist employers in retaining quality employees in the
workplace. They are also designed to provide existing employees with
necessary employability skills to enhance their effectiveness and have also
been effective for Workforce Development teams. In addition, Human
Resource professionals in understanding the specifications of positions
within the workplace. Support staff is crucial to the overall success of an
equine practice. Once quality employees have been identified and have
become an integral part of the practice, the challenge to the practice
owner is employee retention. Many factors come into play, and a balance
must be struck between what is necessary to keep employees happy and
what the practice can realistically provide. The most-important and
obvious aspect of employee retention is compensation.
A well designed incentive program will attract the
right people and keep them and can impact on delivering planned
business results as well as reinforcing desired employee behaviors. Making
up the difference If the employee has realistic expectations as to what the
practice can pay, then problems in the future hopefully will be avoided.
The practice might be able to make up the difference by providing other
benefits both tangible and intangible. Providing health insurance will be
highly valued by most employees. Giving bonuses when the practice is
able, allowing flexible time off and starting some sort of retirement fund
for all employees can help make up the difference for a lower wage scale.
Letting employees know that they will be paid overtime during the busy
season will be an incentive for the longer hours worked, too. Having a
friendly, supportive workplace where employees want to come to work is
probably one of the most important aspects of employee retention. This
can be accomplished by treating employees as equals. In today's market
economy, employment situations change constantly, and the person who
works his or her entire career for the same business is less and less
common. If employees are staying with the practice from two to five years,
then the employer probably has done what is realistic and necessary to
retain employees. There always will be those situations where employees
leave after being with the practice for just a short time.
Companies now adopt more than one technique to create an internal
environment that will retain their employees. The most common of them
Employees leave companies where intra-
organisational interactions are unstructured, and decisions, ad-hoc and
driven more by personal prejudice rather than professional consideration.
By adopting systems that introduce an element of objectivity into its
internal operations, a company can create a better workplace.
Moving FromFamily ToProfessionalManagement.
In most family-managed organizations,
professional managers leave because they cannot see themselves holding
key positions, or functioning with the level of independence that their
designations merit. By inducting professionals into senior management
positions, a company can lower its attrition-rate.
Employees like to know how, when, and by whom
their performance is going to be measured. An appraisal process that lists
objective and measurable criteria for performance appraisal removes the
uncertainty in the minds of employees that their superiors can rate their
performance any which way they please.
People like to work in organisations where their
opinions count. The higher an employee's involvement in decision-making,
the higher is the organization retention-level. A participative decision-
making process is good; total empowerment, better.
Most companies fall into the trap of holding an
employee accountable for a specific activity without empowering her with
the authority to perform it well. Often, the situation is exacerbated by the
fact that they vest another employee with the same authority, but do not
hold him accountable!
Obsessed with catering to the demands of their
external customers, companies
ignore their internal customers. Periodic employee satisfaction surveys can
highlight the potential flash points, and enable the company to take
AchievingA MatchBetween IndividualAndOrganisational
Many companies fall into the trap of expecting their
employees to subsume their individual objectives before the organisational
one. This forces employees to leave. The best companies achieve a
balance between the two.
Money isn't a motivator, but it is an effective de-
motivator. While organisations that pay best-in-industry salaries may find
themselves unable to use that fact to motivate their employees, those that
do not could find their best employees leaving.
People do not like to work in black-box like organisations,
where information is rationed out on a need-to-know basis. They prefer a
transparent organisation that is willing to share every aspect of its
functioning with its employees.
A company that constantly fills vacancies by hiring from
outside is certain to face
retention problems. Employees who realise that they are unlikely to be
promoted to fill the vacancies will leave the organisation. Growing your
own is a sound retention strategy.
As the job-profiles and desired skills-sets for a particular job
change, companies may feel the need to hire employees with new skills, or
retrain their existing employees. Companies that choose to do the latter
will find it easier to retain their people since the training signals that the
organisation values their contribution, and is willing to invest in upgrading
Employees are not just warm bodies; they
are individuals with families and lives
of their own outside the workplace. Organisations that recognise this, and
help employees achieve a better balance between life and works are likely
to face fewer problems than those that do not.
Research Methodology is a systematic method
of discovering new facts or verifying old facts, their sequence, inter-
relationship, casual explanation and the natural laws which governs them.
Research Methodology explained by Redman and Mory are as follows
systematized effort to gain new knowledge Research Methodology is
original contribution to the existing stock of knowledge making for it
advancement. It is the purist of truth with the help of study.
Observation, comparison and experiment. In short also covers the
systematic method of finding solution to a problem is research. It also
covers the systematic approach concerning generalization and the
formulation of the theory. Different stages involved in research consists of
enacting the problem, formulating a hypothesis, collecting the facts or
data, analyzing the facts and reaching certain conclusion either in the form
of solution towards the concerned problem or in generalization for some
In Research Methodology mainly Data plays an important role. The Data is
divided in two parts:
a) Primary Data.
b) Secondary Data.
Is the data, which is collected directly by direct personal interview,
interview, indirect oral investigation, Information received through local
agents, drafting a schedule, drafting a questionnaire, job portals.
Secondary Data -
Is the data, which is collected from the various books, magazine and
material, reports, etc. The data which is stored in the Organization and
provide by the HR people are also secondary data. The
various information is taken out regarding that subject as well other
subject from various sources and stored. The last years data stored can
also be secondary data. This data is kept for the internal use of the
organization. The HR manual is for the internal use of the organization
they are secondary data which help people to gain information.
The well specified and identifiable group is known as a population, and
selected number of persons or objectives is known as a sample.
Population may be of two types ie; finite and infinite population.
Is one where all the members can be easily counted .
Infinite population –
Is one whose size is unlimited and therefore its members
cannot be counted.
Sampleandsampling method -
Is a smaller representation of the population , it
is any number of persons selected to represent the population , according
to some rules or plans .ON the basis of sample sampling methods are
identified which method to choose generally there are two methods of
sampling ie; probability sampling method and non-probability sampling
For the process of retaining employees in BALIC
the basic tool which was used is through the tool of structured interview ,
in which a questionnaire was prepared by taking few dimensions which can
be the cause of attrition on the basis of these dimensions. In this process ,
the number of causes or variables which directly or indirectly increases the
rate of attrition and leads towards dump of employee’s turnover debt were
sorted out on the basis of those dimensions or causes a well structured
questionnaire was prepared named “ EMPLOYYEE ATTRITION RATING
SCALE” , the questionnaire had its two parts ie; first part as closed – form
questionnaire which was based on the dimensions sorted down , consisting
of thirteen statements and second part as open- ended questionnaire which
included suggestions provided by the attired employees , followed by the
process of data collection by two sources ie; primary source which included
telephonic interview of exit employees and by secondary source which
included drawing information from the website of BALIC and also by talking
to the existing employees of BALIC to understand the current problem
across the insurance sectors .
The variables which were identified to understand the causes of attrition
and exit in the fiscal year (2009-2010) in BALIC were the primary, and
statistical data provided by BALIC were divided into four basic areas of
UP-2 region which is based on the basis of -
Tenure basis ,
Monthly work basis .
The division basis basically includes the four regions of UP-2 ie ; Allahabad
Gorakhpur ,Jaunpur and Varanasi . The departmental basis included all its
sales and non-sales departments which marked attrition rate also including
exits on the tenure and monthly basis .
The variables identified to understand the causes of attrition are :-
1) Organizational Culture which includes in itself
a) Relationship with colleagues,
b) Leadership style,
c) Flow of communication.
2) Job Satisfaction which includes in itself
a) Work Motivation,
3) Growth and Development which includes
a) Learning and development ,
b) Growth prospects.
4) Work –Life balance.
The questionnaire was thus prepared by
keeping these dimensions as basis , then followed by the process of data
collection with the help of structured interview and thus data was
recorded in standardized form on the basis of Likert scale ie; 5-point
rating scale ranging from strongly agree to strongly disagree. The
questionnaire was standardized by using Factor Analysis method.
The closed-ended questionnaire was for
measuring the causes of attrition and the open-ended form consisted of
suggestions provided by them, which will play part of retaining
employees for BALIC so that causes of leaving organization and to help
reducing attrition rate and also help in retaining employees for BALIC.
This project is carried out as per the above research plan. All suggestion
and recommendation are based on findings of the research. As for all
researches planning is very crucial so is the execution of research plan. The
following topics handle the execution of this plan.
The main purpose of conducting structured
interview is to collect data for exit analysis is to know the particular causes
of attrition which will help in retaining employees in the form of
suggestions given by them.
To carry out the exit analysis I had to prepare
questionnaire and collect data in the
Standardized form during their exit interviews. The statements were
gradually recorded in Excel sheet format for the FY (2009-2010) in the
form of Likert Scale ranging from 1 to 5 i.e.; ranging from strongly agree
to strongly disagree and in the other part of the questionnaire the
suggestions for BALIC regarding the causes of attrition was recorded in
the standardized form.
The wel identified and specified group is known as a population. It may
be of two types ie;
Is one where all the members can be easily counted. Whereas
Infinite population –
Is one where size is unlimited and therefore its members cannot be
In this report population is finite in nature and population size is 452.
It is the representative of population which holds all the characteristics of
Sample size of this research report is 117. Out of which it was
divided into three parts ie
Cases of voluntary resignation - 91
Cases of involuntary absconding -22
Cases of involuntary termination -4
So our sample size is 91 as report is based on the cases of
For the process of collecting data the structured interview was conducted
in which all the 13 statements where asked to the exited employees and
they were asked to reply on the basis of 5- point rating scale ie; LIKERT
SCALE and also subjective responses were provided by them in the form
of suggestions .after the process of data collection these 13 statements
where arranged accordingly on the basis of dimensions. These 4
dimensions are as below-
This dimension includes in it some sub-dimensions :
Relationship with colleagues including statement (10).
Leadership styles including statements (2 , 12).
Communication including statement (13)
Job satisfaction –
It also includes some sub-dimensions along with it:
Work motivation including statements (1, 5, 6, )
Stress including statements (7, 11).
Work life balance which includes statements (3, 9).
Growth & development –
It also includes some sub-dimensions along with it:
Learning & development which includes statements (8).
Growth prospects which includes statements (4).
Measuring scale taken for this
project report is 5- point rating scale, ie; LIKERT SCALE .thus the scale constructed with
the title employee’s attrition rating scale:
strongly agree neutral disagree strongly
1. Were you clear about your role in
2. Did you had harmonious
relationship with your boss.
3. Were you able to develop harmony
your personal & professional life .
4. Are there good growth prospects
for you in the organization.
5. Do you think that your knowledge
7 skill was
properly utilized .
6.Were you satisfied with the salary
you according to your job .
7. Were you demanded to work more
was required out of your job .
8. Had you been provided enough
for development through training
9. Did you had continuous hectic
10. Did you had harmoious
relationship with your
colleagues at workplace.
11. Is work pressure main reason for
you to leave
12. Did you had autonomy of your
own self to take
decisions in your organization .
13. Were you able to communicate
directly to your
boss regarding your professional
India as a country is less systems-driven and more relationship-driven.
Consequently every employee has high expectations from the HR department. However, due to
their administration-heavy roles, HR managers are unable to meet the needs of some or several
employees, andlandup displeasing many, says.- (T.C. Rao)
Employee expectations have changed
enormously in today‘s growing economy, making it increasingly important
to attract the 'right' kind of employee. It is essential to learn the
expectation of employees from organization, this achieves employee
satisfaction. While conducting Exit Interviews employees were asked to
express what they had expected while joining the organization.
Opportunities for growth and development help employees
expand their knowledge, skills and abilities, and apply the competencies
they have gained to new situations. The opportunity to gain new skills and
experiences can increase employee motivation and job satisfaction and
help workers more effectively manage job stress. This can translate into
positive gains for the organization by enhancing organizational
effectiveness and improving work quality, as well as by helping the
organization attract and retain top quality employees. By providing
opportunities for growth and development, organizations can improve the
quality of their employees' work experience and realize the benefits of
developing workers to their full potential. THEY has to work on detailed
skill / competence maps and job descriptions for all positions in the
Company. The organization's structure and recruitment strategies are
aligned to provide reasonable opportunities for career advancement, by
way of promotions and horizontal growth to employees, who extract full
potential of the various opportunities available within the Company.
Company should provide an excellent system of well-designed tools and
processes where hard work, initiative, productivity and attitudes go hand
in hand with rewards and growth.
These should be well integrated into the
individual career goals of its employees. Developmental strategies and
potential identification mechanisms should be tailored to raise an internal
pool of resources, at various levels, that can be elevated to meet the
organizational requirement for people with higher competencies, as
against external sourcing and induction of potential.
Continuing education courses
Career development or counseling services
Skills training provided in-house or through outside training centers
Opportunities for promotion and internal career advancement
Coaching, mentoring, and leadership development programs
Career development is the
ongoing acquisition or refinement of skills and knowledge, including job
mastery and professional development, coupled with career planning
activities. Job mastery skills are those that are necessary to successfully
perform one's job. Professional development skills are the skills and
knowledge that go beyond the scope of the employee's job description,
although they may indirectly improve job performance. Since career
development is an ongoing, dynamic process, employees may need
encouragement and support in reviewing and re-assessing their goals and
activities. You are in a key position to provide valuable feedback and
learning activities or resources. Formal training and classes away from the
job are effective in providing new
information, but adult learners also need to practice new skills. Therefore,
you can contribute significantly to your staff member's career
development by supporting career development activities within your
Current information about the
organization and future trends helps employees create more realistic
career development goals. Focus on skill development contributes to
learning opportunities for promotion and/or lateral moves contribute to
the employee's career satisfaction. A greater sense of responsibility for
managing one's own career contributes to self-confidence Career planning
and development clarifies the match between organizational and
individual employee goals It's cost-effective to use your own staff talent to
provide career development opportunities within your department Career
development increases employee motivation and productivity Attention to
career development helps you attract top staff and retain valued
employees Supporting career development and growth of employees is
mandated by the Philosophy of Human Resources Management
Annually, conduct an individual development plan and career
discussion with employees and require other supervisors in your
department to do the same.
Hold supervisors in your department accountable for supporting
employee development efforts.
Create programs and activities to provide skill development, such as
job rotation, cross-training, mentoring, internships, coaching, and
career strategy groups.
Recognize that your role includes providing support and/or release
time for staff members' development beyond their current jobs.
Support requests for flexible work arrangements from staff members.
Serve as a role model by participating in career and professional
development opportunities yourself.
See staff members' applications for other positions as a healthy sign
of a dynamic workplace support lateral moves within your
Create job vacancy listings that allow for the most diverse applicant
pool while honoring transferable skills.
Helps employees identify strengths, weaknesses, interests,
and values by maintaining open, effective communication and
ongoing encouragement. You can improve your coaching by:
Encouraging two-way dialogue
Showing employees how to identify their skills, interests, and values
Scheduling uninterrupted career development discussions
Provides organizational information, realities, and resources to
employees. You can improve your advising by:
Helping employees develop realistic career goals based on your
department's needs and their individual development plans
Helping employees understand the current opportunities and
limitations on the campus
Advising employees on the feasibility of various career options.
Evaluates employees' performance in an open, candid way and
relates this to potential opportunities. You can improve your
appraisal skills by:
Providing frequent feedback in a way that fosters development
Conducting performance appraisals that define strengths,
weaknesses, and career development needs
Relating current performance to future potential in realistic ways
Using an individual development plan as a tool for continual
feedback and development
Helps employees meet their goals through contacts with
people and resources.
You can improve your referral agent skills by:
Helping employees formulate development plans and consulting on
Providing opportunities for experience, exposure, and visibility, such
as committees and task forces.
Using personal resources who you know and what you know to
Assisting in seeking employees' placement lateral or vertical.
Considerable number of employees mention unsatisfactory
compensation package as one of their reasons to quit from
organizations. Organizations should hold such plans to enhance
compensation system based on following:
Compensation is a
systematic approach for providing monetary value to employees in
exchange for work performed. Compensation may achieve several
purposes assisting in recruitment, job performance, and job satisfaction.
Compensation Management is an integral part of the management of the
organization. Compensation Management contributes to the overall
success of the organization in several ways. To be effective, the
organizations must appreciate the value of competitive pay, their human
resources, and have an investment view of payroll costs.
Process to Develop employee Compensation Systems
Develop a program outline.
Designate an individual to oversee designing the compensation
Develop a compensation philosophy.
Conduct a job analysis of all positions.
Establish grade pricing and salary range.
Determine an appropriate salary structure.
Develop a salary administration policy.
Obtain top executives' approval of the basic salary program.
Communicate the final program to employees and managers.
Monitor the program.
which are cash compensation items that create an employee's standard of
which may be generally classed as non-cash or benefit items that protect an
employee's income or contribute to the employee's standard of living; and
are those rewards that are derived from working environment, which are valued
internally by an individual, and cover areas such as the opportunity for personal growth, quality of
work life, job satisfaction, challenge, personal and professional development opportunities,
belonging, freedom to act, visionary leadership, etc.
Paying for position
Paying for person
Paying for performance
The 3P approach to compensation management
supports a company's strategy, mission and objectives. It is highly
proactive and fully integrated into a company's management practices and
business strategy. The 3P system ensures that human resources
management plays a central role in management decision making and the
achievement of business goals.
3P approach can be used to:
Recruit and retain qualified employees.
Increase or maintain morale/satisfaction.
Reward and encourage peak performance.
Achieve internal and external equity.
Reduce turnover and encourage company loyalty.
Modify (through negotiations) practices of unions.
Recruitment and retention of qualified employees is a
common goal shared by many employers. To some extent, the availability
and cost of qualified applicants for open positions is determined by
market factors beyond the control of the employer. While an employer
may set compensation levels for new hires and advertise those salary
ranges, it does so in the context of other employers seeking to hire from
the same applicant pool.
Components for 3Papproach:
Compensation will be perceived by employees as fair if based on
systematic components. Various compensation systems have developed to determine
the value of positions. These systems utilize many similar components including job
descriptions, salary ranges/structures, and written procedures.
The components of a compensation system include:
Policies and Regulations.
One of the basic aim of this model is retain talented
THE PEOPLE (CMM) :
The People Capability Maturity Model (People CMM)
is a roadmap for implementing workforce practices that continuously improve the
capability of an organization's workforce. Since an organization cannot implement all
of the best workforce practices in an afternoon, the People CMM introduces them in
stages. Each progressive level of the People CMM produces a unique transformation in
the organization's culture by equipping it with more powerful practices for attracting,
developing, organizing, motivating, and retaining its workforce. Thus, the People CMM
establishes an integrated system of workforce practices that matures through
increasing alignment with the organization's business objectives, performance, and
changing needs. The People CMM was first published in 1995 and has successfully
guided workforce improvement programs in companies such as Boeing, Ericsson,
Lockheed Martin, Novo Nordisk IT AlS, and Tata Consultancy Services. The People
CMM has been designed primarily for application in knowledge-intense organizations.
The People CMM's primary objective is to improve the capability of the workforce.
Workforce capability can be defined as the level of knowledge, skills, and process
abilities available for performing an organization's business activities. Workforce
capability indicates an organization's readiness for performing its critical business
activities, likely results from performing these business activities, and potential for
benefiting from investments in process improvement or advanced
technology. In order to measure and improve capability, the workforce in most
organizations must be divided into its constituent workforce competencies. Each
workforce competency represents a unique integration of knowledge, skills, and
process abilities acquired through specialized education or work experience.
Strategically, an organization
wants to design its workforce to include the various workforce competencies required
to perform the business activities underlying its core competencies
[Prahalad 90]. Each of these workforce competencies can be characterized
by its capability-the profile of knowledge, skills, and process abilities
available to the organization in that domain. The philosophy implicit in the
People CMM can be summarized in ten principles:
1. In mature organizations, workforce capability js directly related to
2. Workforce capability is a competitive issue and a source of strategic
3. Workforce capability must be defined in relation to the organization s
strategic business objectives.
4. Knowledge-intense work shifts the focus from job elements to
5. Capability can be measured and improved at multiple levels, including
individuals, workgroups, workforce competencies, and the organization.
6. An organization should invest in improving the capability of those
workforce competencies that are critical to its core competency as a
7. Operational management is responsible for the capability of the
8. The improvement of workforce capability can be pursued as a process
composed from proven practices and procedures.
9. The organization is responsible for providing improvement
opportunities, and' individuals are responsible for taking advantage of
10. Because technologies and organizational forms evolve rapidly,
organizations must continually evolve their workforce practices and
develop new workforce competencies.
Overview ofthe PeopleCMM
The People CMM is an organizational change model. It is
designed on the premise that improved workforce practices will not
survive unless an organization's behavior changes to support them. The
People CMM provides a roadmap for transforming an organization
by steadily improving its workforce practices. As do all Capability Maturity
Models, the People CMM consists of five maturity levels, or evolutionary
stages, through which an organization's workforce practices and processes
evolve. At each maturity level, a new system of practices is added to
those, implemented at earlier levels. Each overlay of practices raises the
level of sophistication through which the organization develops its
workforce. Within this environment individuals experience greater
opportunity to develop their career potential and are more motivated to
align their performance with the objectives of the organization. From the
perspective of the People CMM, an organization's maturity is derived from
the workforce practices routinely performed inside it, and the extent to
which these practices have been integrated into an institutionalized
process for improving workforce capability. In a mature organization,
responsible individuals perform repeatable workforce practices as ordinary
and expected requirements of their positions. The more mature an
organization, the greater its capability for attracting, developing, and
retaining the talent it needs to execute its business.
A maturity level represents a new level of organizational capability
created by the transformation of one or more domains of an organization s processes
The People CMM stages the implementation of increasingly sophisticated workforce
practices through these maturity levels. With the exception of the Initial Level each
maturity level is characterized by a set of interrelated practices in critical areas of
workforce management. When institutionalized and performed with appropriate
regularity, these workforce practices create new capabilities within the organization for
managing and developing its workforce.
The Five MaturityLevel Of P-CMM
The P-CMM consists of five maturity levels that lay
successive foundations for continuously improving talent, developing
effective teams, and successfully managing the people assets of the
organization. Each maturity level is a well-defined evolutionary plateau
that institutionalizes a level of capability for developing the talent within
the organization. Each maturity level is a well-defined evolutionary plateau
that institutionalizes a level of capability for developing the talent within
The key process areas at Level 2 focus
on instilling basic discipline into workforce activities. They are work
environment, communication, staffing, performance management, training,
The goals of Work Environment are:
1. An environment that supports the performance of business processes is
established and maintained.
2. The resources needed by the workforce to perform their assignments
are made available.
3. Distractions in the work environment are minimized.
The goals of Communication are:
1. A social environment that supports task performance and coordination
among individuals and groups is established and maintained.
2. Information is shared across levels of the organization.
3. Individuals develop skills to share information and coordinate their
4. Individuals are able to raise grievances and have them addressed by
The goals of Staffing are:
1. The organization actively recruits for qualified talent.
2. The most qualified candidate is selected for each position.
3. Selected candidates are transitioned into their new positions.
4. Members of a unit are involved in its staffing activities.
The goals of Performance Management are:
1. Job performance is measured against objective criteria and documented.
2. Job performance is regularly discussed to identify actions that can
3. Development opportunities are discussed with each individual.
4. Performance problems are managed.
5. Outstanding performance is recognized.
The goals of Training are:
1. Training in the critical skills required in each unit is provided.
2. Individuals receive timely training that is needed to perform their
3. Training opportunities are made available to all individuals.
The goals of Compensation are:
1. Compensation strategies and activities are planned, executed, and
2. Compensation is equitable relative to skill qualifications and
3. Adjustments in compensation are made periodically based on defined
The key process areas at Level 3 address issues
surrounding the identification of the organization's primary competencies
and aligning its people management activities with them. They are
knowledge and skills analysis, workforce planning, competency
development, career development, competency-based practices, and
The goals of Knowledgeand Skills Analysis are:
1. The core competencies required to perform the organization's business
processes are known.
2. Knowledge and skills profiles exist for each business process.
3. Knowledge and skills profiles are updated for anticipated future needs.
The goals of Workforce planning are:
1. The organization develops a strategic plan for long-term development
of the competencies and workforce needed for its business operations.
2. Near-term workforce and competency development activities are
planned to satisfy both current and strategic workforce needs.
3. The organization develops talent for each of its key positions.
4. The organization tracks performance in achieving its strategic and near-
term workforce development objectives.
The goals of Competency Development are:
1. The organization knows its current capability in each of the core
competencies required to perform its business processes.
2. The organization develops capabilities in its core competencies.
3. Individuals develop their knowledge and skills in the organization' core
The goals of Career Development are:
1. Career development activities are conducted with each individual.
2. The organization offers career opportunities that provide growth in its
3. Individuals are motivated to pursue career goals that optimize the value
of their knowledge and skills to the organization.
The goals of Competency-Based Practices are:
1. Workforce practices are tailored to motivate individuals and groups to
improve their knowledge and skills in the core competencies of the
2. Workforce activities are adjusted to support development in the core
competencies of the organization.
3. Compensation and reward strategies are tailored to motivate growth in
the core competencies of the organization.
The goals of Participatory Cultureare:
1. Communication activities are enhanced to improve the flow of
information within the organization.
2. Decisions are made at the lowest appropriate level of the organization.
3. Individuals and groups participate in decision-making processes that
involve their work or commitments.
The key process areas at Level 4 focus on
quantitatively managing organizational growth in people management
capabilities and in establishing competency-based teams. They are
mentoring, team building, team-based practices, organizational
competency management, and organizational performance alignment.
The goals of Mentoring are:
1. Mentoring activities are matched to defined objectives.
2. Mentors are selected and prepared for their responsibilities.
3. Mentors are made available for guidance and support to other
individuals or groups.
The goals of Team Buildingare:
1. Teams are formed to improve the performance of interdependent tasks.
2. Team assignments are made to integrate complementary knowledge
3. Team members develop their team skills.
4. Team members participate in decisions regarding their work.
5. The organization provides standard processes for tailoring and use by
teams in performing their work.
The goals of Team-Based Practices are:
1. The organization adjusts its workforce practices and activities to
motivate and support the development of team-based competencies
within the organization.
2. Workforce activities are tailored to support the needs of different types
of teams within the organization.
3. Team performance criteria are defined and measured.
4. Compensation and reward systems are tailored to motivate improved
The goals of Organizational Competency Management are:
1. Measurable goals for capability in each of the organization's core
competencies are defined.
2. Progress toward achieving capability goals in the organization's core
competencies is quantified and managed.
3. The knowledge and skills-building capability of the organization's
competency development activities is known quantitatively for each of its
The goals of Organizational Performance Alignment are:
1. Measurable goals for aligning individual, team, unit, and organizational
performance are defined.
2. Progress toward achieving performance alignment goals is quantified
3. The capability of workforce activities to align individual, team, unit, and
organizational performance is known quantitatively.
The key process areas at Level 5 cover the
issues that address continuous improvement of methods for developing
competency, at both the organizational and the individual level.
They are personal competency development, coaching, and continuous
The goals of Personal Competency Development are:
1. Individuals know their capability in each of the competencies involved in
2. Individuals continuously improve their knowledge and skills in the
competencies involved in their work.
3. Participation in improving personal competencies is organization wide.
The goals of Coaching are:
1. Coaches are selected for their expertise and prepared for their
2. Coaches work with individuals to improve their personal competency
3. Coaches work with teams to improve their team-based competencies
The goals of ContinuousWorkforce Innovation are:
1. Innovative workforce practices and technologies are evaluated to
determine their effect on improving core competencies and performance.
2. The organization s workforce practices and activities are improved
3. Participation in improving the organization’s workforce practices and
activities is organization-wide.
Employee RetentionTechniques According To Suggestions Provided ByExit Employees Of BALIC.
There are some suggestions provided by the exit employees of
BALIC provided on the basis of the questionnaire . which had 4 basic
dimensions on which they replied , which is provided as below-
I. Organizational culture -
In the organizational culture employees showed
dissatisfaction in the areas mentioned below and employees can be
retained by providing improvement in these particular areas –
Provide training to enhance managerial skills.
Provide proper time to ASMs to complete tasks.
Stop misguiding sells person’s for selling of plans.
Managers should be provided management skills through training,
they should not be promoted to the post of managers only on basis
Checks should be issued directly to SMs and not should not go in
the hands of Branch Managers .
BALIC needs more advertisement in rural areas .
Make transparency in roles/ policies.
Policies and plans-
Remove top up policies.
Policies need more promotion especially in rural areas.
Remove the concept of LG.
Miss selling of plans by some employees must be stopped.
Give one month time to prepare ICs.
ii. Work Life Balance-
Work - life balance is area which is most important
in human beings life, a balance should be created in such a form as such
neither personal and nor professional life hinder in the development and
in living of the human being’s life. as provided by exit employees areas
where BALIC need to do improvement –
Bring improvement in recruitment policies of BALIC.
Working hours should be specified and after once its over no work
pressure should be pushed by superiors.
Recruit right person for right job.
ii. Job Satisfaction-
If the individual is not satisfied with the job
provided to him so he cannot satisfy either himself or his organization
so job satisfaction is area where improvement is required.
Reduce targets of I single individuals.
Provide freedom of working style .
Wrong commitments should not be given to either employees or to the
Update the environment of office with all the equipments and tools
Growth and development keeps individual
attached to the organization good growth prospects means good
performance of individuals.
Enhance growth prospects especially for Statistic Initiatives and for
Provide proper training including in itself some practical
Standard theory and concepts regarding this topic are not easily
Insurance sectors are very sensitive towards disclosing retention
applied in their company.
Time involved in collecting primary data was considerably high. Even
though respondents were not asked to give any personal details.
One of the biggest assets of the organization is
manpower. This industry is competing life and non-life insurance So, the
biggest challenge in this industry is to attract and retain knowledgeable
manpower. Insurance sectors are facing a shortage of knowledge workers
because the rate at which they lose employees is almost double the rate
at which they hire. In such a scenario where companies are fighting to
combat global business competition, and struggling to survive, employee
turnover comes as a double blow. BALIC approach towards employee
retention is quite unique and very well described. It has been a constant
endeavor on the part of the company to retain talented manpower by
providing good growth opportunities and high compensation package.
And this is what employees expect from organization. As companies have
significantly improved their bottom lines riding on economic growth wave,
high frequent hikes in salary would not be much of a concern.
In today’ s knowledge economy, managing
Human Resource has been the most difficult task. Under taking a project
in BALIC I have learnt causes of attrition and retention strategies that
otherwise could not be understood in books, cause human needs change
and so the retention strategies. There is no prescribed solution to retain
good employees, but pressing need for
companies to plan a retention program remains. This program must
identify good performers who are likely to leave the company and
proactively work to retain them. The program is to be so designed to that
it blends the employees with organisation goal and objective.
“Human Resources in a Globally Competitive Business
Environment”, Wayne F. Cascio, Managing Human Resource,
Tata Mc Craw Hill Edition, pp: 26-29.
Tests ,measurement and research methods in Behavioral
sciences, A.K.SINGH, 5th
edition , Bharti Bhawan.
Fundamentals of Human Resource Management , Decenzo
D.A. & Robbins Stephen P. , eighth edition, Wiley India 2009.
Organizational Behavior , Lthans Fred , 11th
edition , McGRAW
HILL International Edition .
Training Instruments in HRD and OD, Pareek Udai,
Communication in Organization , Fisher D. 2nd
Publishing house, 2007.
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